Loyalty Case Study: Chiptopia

Burritos have always been one of my favourite foods. One of the best burrito experiences I ever had was in my first year of university when my friends suggested we go to Chipotle for a quick bite in between classes. I had never eaten there before, but as soon as I tasted my first bite of salsa-and-guacamole-saturated perfection I knew I was in love.

Since 1993, Chipotle has been providing consumers with burritos, salads, and tacos made with farm-fresh ingredients and a desire to change the fast-food experience. Unfortunately, this dream was derailed in 2015 following an E Coli outbreak whose origins were traced to Chipotle restaurants in Washington and Oregon.

Over the next year, the franchise would suffer significant losses as locations were forced to close in an effort to stop the epidemic. Now that the CDA has declared the outbreak to be over, Chipotle is looking to rebuild their customer base by introducing the Chiptopia rewards program. You can imagine my excitement because a) Chipotle and b) rewards, but I wanted to see if the program was all it was guac-ed up to be (bad pun, no apologies).

Let’s Taco ‘Bout the Good Stuff

Right off the bat, there a couple of really great elements I noticed about the Chiptopia program.

1. Limited Time

Most loyalty programs have been around forever, evolving with the store as a whole. Chiptopia, on the other hand, was conceived as a way of rebranding the business and refocusing its customer base. In light of this the program is only running from July to September of this year, with no word on whether the program will be revamped or continued at a later date.

This might leave some of you wondering how it can possibly succeed, but I’m here to assure you that it can. Retailers like Frank + Oak are able to create hype around each of their products by marketing them with a scarcity element that increases the perceived value.

Chiptopia is operating under the same principle. With a lifetime of only three months, the program is automatically perceived as valuable because it’s not always available. Therefore, in order to take advantage of the offered rewards, customers need to act fast. These types of marketing tactics (including a countdown clock prior to the program’s launch date) create a sense of exclusivity and urgency, enticing customers to participate.

2. Easy to See Value

Like many restaurant rewards programs, Chiptopia rewards its members with free meals after purchasing a certain number of entrees. Unlike similar programs, though, Chipotle’s program provides its customers with the opportunity to move through three different levels of earning, with each level requiring less financial investment than the previous one.

As you can see, the program is divided into three groups: Mild, Medium, and Hot. Once you’ve purchased four meals in a month you’re moved from the Mild tier to Medium, and after making three more purchases you graduate to Hot.

This is already a pretty great deal, especially when you consider that the average person eats out 4.2 per week. It gets even better, though, because that meal you’re earning for free counts towards the number of entrees required to reach the next tier. That means you only need to pay for nine meals in order to reach the top of the Chiptopia pyramid.

I’m pretty sure this is the first loyalty program I’ve ever come across where the reward can be used as a way to earn additional perks. Organizing the rewards in this way creates a program that is achievable and easy to understand with clear-cut value for the customer. If that isn’t a positive point, I don’t know what is.

3. Bonus Rewards

As if the well-designed tiers weren’t enough, Chiptopia also creates the opportunity for its customers to earn rewards once the program’s finished:

Each of these rewards is valuable to a wide variety of customers, and helps increase the desire to buy-in, promising value to customers through every stage of the program. Talk about the gift that keeps on giving!

Let’s Taco ‘Bout the Bad Stuff

Sometimes your taco falls apart in your hands, and while that doesn’t make it any less delicious it definitely affects your overall enjoyment. Here’s where I think the Chiptopia shell crumbles.

1. Gimmicky

I know that I was just praising the limited-time nature of this program, so I totally understand if this sounds hypocritical. That being said, this program feels a little bit do-or-die to me, and I’m pretty sure that’s because it is. Chipotle has been forced to scramble to recover their public image and while I still think this is a great way to do it, it feels a bit disingenuous.

While companies are certainly able to introduce loyalty and retention strategies at any point, loyalty programs often take time to launch and develop to the point of being successful. By offering a program to customers Chipotle is setting a standard that will then be discarded at the end of September, setting expectations that, when not met, may lower overall customer satisfaction.

2. Restricted Earning

The ratio between spending and redeeming rewards with Chiptopia is fantastic – top notch, even. Unfortunately the same can’t be said for earning them. Chiptopia members are restricted to one purchase per day per card, disallowing them from earning rewards on multiple meals purchased on the same day.

This restriction makes the program undesirable for anyone wishing to take their family to Chipotle for a delicious family fiesta. Unable to turn each of their purchases into rewards, the program isolates certain demographics, limiting the benefits to single people. This disregard for wide demographics of customers is surprisingly, especially considering the fact that Chiptopia is an attempt to help Chipotle rise from the ashes.

3. Nutritional Impact

This last issue is definitely more of a personal one, but one that I feel the need to mention. Yes, Chiptopia will get me up to nine free burritos over the course of the summer, but the impact this will have on my body – unlike the impact on my taste buds – isn’t a positive one.

The average burrito meal can range anywhere from 900 to 2000 calories with at least 50 grams of fat which, by anyone’s standards, isn’t great for you. As a millennial I care a lot about my physical health, and if the cost of becoming a Hot level member is eating over 8000 calories worth of burritos in one month, the price might be too high (no matter how delicious).

This attitude is largely affected by the timeline of the program, because let’s be real – eating that many burritos over a year? I’d love to. As I pointed out earlier, the average person already eats out enough times each week to get the most out of the program, but having to eat the same thing everyday just to reach this reward makes it harder to swallow.

Wrapping It Up

Chiptopia is unlike any program I’ve seen before. By being offered only for a limited time, the program may struggle with the limited earning parameters and transparently gimmicky nature of the program.

That being said, the program still has the potential to see phenomenal success! With tiers, bonus rewards that demonstrate real value to customers, and the power of elusive marketing, Chiptopia can satisfy all of your burrito cravings. Better hurry, though – it’ll be gone before you know it.